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86pc not aware of credit bureau

Credit Sudhaar, India's premier Credit Health Improvement Company released the results of its first ever survey on Credit Health in India.

The survey was conducted across 8 cities in India and sampled over 300 respondents.

Credit awareness in India has a long way to go, with more than 85pc of the respondents not being aware of what Credit Bureau's are.

Delhi and Pune led the country with 1 out of 4 respondent being aware of Credit Bureaus.

In fact, a whopping 92pc of respondents are unaware of their credit scores. Delhi, Bangalore and Pune had more than 10pc respondents knowing their score.

"The primary objective of conducting the survey was to understand the cause and effect analysis of clients who have been through credit impairments. In other words, we wanted to understand the reasons for the unavailability of credit to clients due to negative credit history and a low credit score," said Arun Ramamurthy, Founder, Credit Sudhaar.

"The survey revealed that 91pc of the customers were not aware of the impact of non-payment of credit dues. We feel that a lot of this could have been avoided if they would have been aware of their credit health and the impact of non-payment of credit dues.

"We also realized during the survey that penetration of professional credit counseling is almost nonexistent in India, which leaves space for presence of credit advisory services," said Ramamurthy.

While a mere 4pc had reviewed their Credit score in last 1 year, 98pc of the respondents who took the survey were unable to comprehend the report that was shared with them.

The survey revealed protection of credit as a major concern as none of the respondent had taken any steps to protect their identity from theft.

Even as will is an important tool when it comes to securing inheritance and ensuring a dispute free transfer of assets.

Only 1pc of the respondents have made a will and further more had no idea or will to make or understanding of a will. On tax optimization front, only 17pc of the customers have taken help from an expert.

As a part of the survey, Credit Sudhaar analyzed 2116 Credit Bureau Reports and accordingly analyzed the details reported in the Bureau reports with the individuals. Based on the analysis errors were identified in 557 reports of unique individuals.

Another part of the survey was aimed to understand the penetration of major credit bureaus in Indian market, specifically with major financial institutions.

It was evident that CIBIL is the bureau most of the institutions upload their data to whereas Equifax is a close second. In terms of Microfinance lending, the market is dominated by Highmark and Equifax.

"We undertook this survey to understand and analyze certain parameters related to overall understanding of credit profile of an individual at a retail level and its inroads in Indian Market and context. Consumer Survey on Patterns and behavior of individual credit profiling in India, Credit Impairment, Impact of Errors in Credit Bureau reports and Credit Bureaus and their penetration in Financial Institutions in India were the four major aspects in which we have studied this survey," said Gaurav Wadhwani, Co-founder, Credit Sudhaar.

"The results suggests a wide gap between where clients need to be and where they are in terms of their awareness and overall understanding of Credit.," he said.

Key findings of the Survey:

92 pc of respondents are unaware of their credit scores86pc of respondents have not heard about any credit bureauOnly 4 pc of the people have checked their credit scores in the last 1 year98pc of people could not decipher a sample credit report when they were shown one91 pc of the people who default on credit are unaware of any of the negative consequences of their actionsOnly 1pc of the respondents have made a WillNone of the respondents had ANY kind of identity protectionOverall, credit awareness and credit protection are extremely lowCIBIL, on account if its vintage value, is the pre-eminent bureau but Equifax is catching up fast1 in 4 CIBIL credit reports have errors1 in 5 CIBIL credit reports have "MAJOR" errors in them